I think this goes past the BAR concept.
If they wanted full auto, then all they had to do was make the M16A2 full auto.
At least doctrinally someone felt they needed more close in accurate selective fire rifle power at the "fire team level" and they could do with less full auto machine gun fire support.
Obviously with weapons development mired in "the M16/M4" mindset that it can't be improved, they brought this one in much like the Navy did with the F18E/F (all new bird that looked like the old one)
How well it works or does not then depends on who you are fighting, the terrain and environment. Marines had a disadvantage in Iraq with 20 inch M16, when the M4 was better for "most" of the fighting that was going on because it was close range.
However, with the longer distances and less built up areas of Afghanistan, most of the time the M16A2 with its 20 inch barrel gives you better long reach and not a hindrance (after all, we fought WWII with the Garand, though reports are that many companies supplemented it to about half of them with sub machine guns)
So, long term does it work and do they introduce it to the full fire team a bit at a time. Stay tuned.
Brits tired something similar with their bullpup. A bit different as their had a barrel length of 24 inches (they could do it and because of the short length of the action). Didn't prove out, though it then turned into a useful long range precision weapon rather than the BAR role they thought it would.
When you don't have anything better you use what you got, someone is trying to come up with something better.
The best solution is some variation of the changeable barrel rifles out not (XCR etc) that you can tune to your needs. Lots of close quarter stuff, mostly carry 14 inch short barrels with some longer ones for sniper long range engagement uses.
In the mountains and plains, 16-18-20 inch barrel.
It would also help to get to a folding stock so the length in vehicles was not an issue (which is why the M4 is so short).
Getting away from the DI is a major change for the Mk27/HK, so its a way to change a weapon and not get into another boondoggle run by the Army that has produced nothing, let alone improved significantly in 30 years (Picitinay railsls are the only new thing since Name, and that works with any rifle)